The vast majority of home owners who bought a leasehold house now regret it, many feel they were mis-sold and some are struggling to sell up, a report has found. NAEA (National Association of Estate Agents) Propertymark surveyed more than 1,000 people who had bought a leasehold house in the past decade. Like some people living in flats, where charges may cover maintenance costs of shared spaces, leasehold house owners can find themselves paying ground rent as well as other fees to make changes to their homes. The Government has previously said developers have been increasingly selling houses on leasehold terms - adding to buyers' costs. It has been working to make it cheaper and easier for existing leaseholders to buy out their freehold.
NAEA Propertymark said freeholders typically charged home owners £1,422 to install double glazing, £887 to change the kitchen units, and £689 to replace the flooring, the research found.
Some faced bills of £527 for changing their blinds and £411 for installing a new front door. NAEA Propertymark's research also found more than half (57%) of home owners it surveyed did not realise what being a leaseholder meant until they had bought the property. Some 94% regret buying a leasehold and 62% feel they were mis-sold, the research found.
More than three-quarters (78%) of leasehold house owners surveyed had bought their home directly from developers. While half of the leaseholders it interviewed were first-time buyers, nearly half (48%) had owned a property before.
Leaseholders paid an average of £277 per year in ground rent when they moved in, and are currently paying £319, with most having been in their properties for three or four years, the report found.
Of those currently trying to sell their home, a third (31%) said they were struggling to attract a buyer because they do not own the freehold and a quarter (25%) said house hunters who were interested were put off when they found out it was a leasehold home.
Most buyers have no idea about the trappings of a leasehold contract until it's too late. Secretary James Brokenshire, announcing housing measures for England, said: "We have seen leaseholders in new-build homes facing unexpected costs rising every year that bear no relation to services and that's not fair. So from now on any new Government funding scheme will contain the condition that the money cannot support the unjustified use of leasehold for new homes.
A Ministry of Housing, Communities and Local Government spokesman said: "It's unacceptable for home buyers to be exploited through unfair and abusive practices within the leasehold system, and the findings in the Propertymark report underline our position that real action is needed. This is why we have already announced measures that include a ban on leaseholds for almost all new-build houses and restricting ground rents to a peppercorn. We are also working with the Law Commission to support existing leaseholders to make buying a freehold or extending a lease faster, fairer and cheaper.
A spokesman for the Home Builders Federation (HBF) said: "The vast majority of new-build houses are sold on a freehold basis, but it can be necessary on occasion to sell new houses with leases.
This includes where the developer itself does not own the freehold. Leases for houses, like flats, commonly include proportionate ground rents that do not impinge on the mortgage ability or saleability of a property and, as such, leasehold is a well-established and secure tenure with which to own a home. In all transactions, builders strive to provide prospective purchasers, their solicitors and their mortgage lenders with all relevant information. Purchasers are always advised to engage their own legal advice during the purchase of a home.